South Africa says there is no Saudi proposal on Denel under consideration

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The South African government is not considering any proposal from Saudi Arabia on taking a stake in struggling state arms company Denel, Public Enterprises Minister Pravin Gordhan said, after the Gulf country offered to partner with Denel last year.

“There is no proposal from the country in question under consideration,” Gordhan said, answering a question from an Inkatha Freedom Party lawmaker about whether the government was considering selling a stake in Denel to the Saudis.

Gordhan added that if any sale of Denel shares were to take place it would follow a transparent, public process.

Saudi Arabia, the world’s third-largest defence spender, last year approached South Africa, seeking to partner with Denel as part of efforts to establish its own defence industry. One source familiar with the offer said the bid – which would include acquisition of Denel’s stake in a joint venture with Germany’s Rheinmetall – was worth around $1 billion.

However, a potential deal has been complicated by the murder of journalist Jamal Khashoggi inside the Saudi consulate in Istanbul. Concerns have also been raised, including by Denel’s chairwoman, over ceding strategic security assets.

South African President Cyril Ramaphosa said last year that Saudi Arabia was one of several suitors interested in Denel and that no decision on a partner had been taken.